The comeback king

Prince Charles was at his lowest ebb after the death of Diana. Two years later he has become the chief royal moderniser. And no one is better placed than him to fight off the growing calls for a republic. Richard Reeves reports

A palace courtier put it beautifully, and with typically British upper-class understatement. 'We do live in interesting times, it must be said.' The accompanying smile was brief.

In the past fortnight - a long time for modern monarchies - the royal family has watched the Sun flirt with republicanism, sparking a heated media debate about the need for a monarch; made front-page news with a fox-hunting expedition by the young princes; been accused of snubbing the Chinese President; and seen a vital prop of the hereditary system, the House of Lords, begin to fade into the sepia photographs of history. The fortnight ended with the royals winning the hearts and votes of the Australian people in a critical referendum on the nation's status as part of the Commonwealth.

Interest in the 'Firm' has reached a pitch last seen after the death of Princess Diana. The whiff of republicanism is hanging around the corridors of power. Both Tony Blair and William Hague are said to be reading Bring Home the Revolution , a passionate call for an 'American revolution' in Britain by Jonathan Freedland, a Guardian journalist.

And New Labour insiders, who say they 'saved' the royals from an untimely PR death in the wake of Diana, are irritated by Prince Charles's continued interventions on genetically-modified foods, fox hunting and human rights. 'We leave them to it now,' said one government insider. 'If they decide to modernise, that is up to them. The monarchy does not feature in our constitutional reform plans.'

With the Murdoch press hinting at an anti-royal line, a cooling of relations with Downing Street and growing public uncertainty about the role of the monarchy, the Australian poll took on an enormous significance in the UK, says Freedland. 'It is obviously disappointing for republicans and we have to learn some lessons from what happened. The issue probably will cool off for a little while now, but I don't think it will go away. The debate has been opened up and I don't think it will simply close.'

None the less, there were sighs of relief around Buckingham and St James's Palaces. A vote to rid Australia of the Queen would have added fuel to an already flickering republican fire at home. Yesterday's victory Down Under buys the monarchy time. If the Aussies, with no particular reason to love us, and a fierce sense of independent nationhood and growing economic and diplomatic ties in the Pacific Rim, still want the Queen, why would we ditch her?

The republicans are sensibly suggesting waiting until Queen Elizabeth dies before killing off the institution - both to buy more time to win over a still-royalist public and take the personal sting out of the attack. 'We bury her with all the dignity that she deserves, a full state funeral,' says Freedland. 'Then we quietly bury the institution at the same time.' This means the first victim of a successful republican movement would be Prince Charles. It is no surprise, then, that he is the monarchy's moderniser, seeking to make an anachronistic institution - based on birthright in a world of equal opportunity - relevant, needed, wanted. He knows that the legitimacy of the monarchy has to be earned.

'When there is a general feeling that something is wrong, that there are problems that need addressing, he is able to articulate those concerns,' said a close adviser to the prince. The adviser compared the launch of an initiative last week on rural poverty to the establishment of the Prince's Trust in the 1980s, a response to urban unemployment. 'He is driven by a tremendous sense of public service. It runs in his veins.'

Insiders portray Charles as a man comfortable with his destiny, rising above the daily political squabbles. 'It is a 1,000-year legacy, so one day's headlines have less impact than a lot of people think,' said one adviser. Others detect a shrewd political brain, watching a man who has cannily reached out to those on the Centre and Left with progressive views on social policy and the environment, while keeping the core pro-royal constituency happy with conservative opinions on architecture, rural issues and education.

'It is a superb piece of political positioning,' said Mark Leonard, director of the Foreign Policy Centre, a think-tank on diplomatic issues and author of a Demos pamphlet on the monarchy. 'He is Luddite enough to keep the Mail and Telegraph happy, but gives liberals glints of progressive policy. It's brilliant coalition-building.'

Charles's strategy is seen by his entourage as simply the latest chapter in the monarchy's long evolution and adaptation to prevailing conditions. They know he could not survive as what one dubbed a 'Barbados beach bum' - he has to prove his worth. But his approach - of being relevant by engaging in public debate - risks provoking political ire. 'It is a fine line to tread,' said Leonard, 'between being a bland, boring figure opening church fêtes and being, effectively, a party political figure.' His view is that Charles is sailing too close to the political wind, especially with those forays over China, fox hunting and GM foods in a matter of days. 'You can get away with so much, but not this much.'

Of the recent coverage, it was only the attacks on him for taking his sons fox hunting that annoyed him. 'It is a bitter pill to be on the front page for doing something you have done pretty much your whole life,' said the palace official. But he knows there is a price to be paid for courting publicity, to promote a new project by the Prince's Trust to help young unemployed people, or promote Welsh beef, or savage a new building - he can't just turn the media attention off when it doesn't suit him.

Charles is well aware that opinion polls suggest continued popular support for the monarchy. If it is 'we the people' who decide, as Freedland wants, then right now we want our monarch. Royal advisers relish the prospect of a referendum in Britain, knowing they would win a thumping majority. The republicans have a long road ahead. 'The interesting debate is not whether they'll survive,' says Leonard, 'it's what they'll turn into.'

The British monarchy has a unique tripartite set of tasks that are increasingly at odds with other - symbolic head of the nation, head of the Church of England, and political figure, signing Acts of Parliament and appointing Prime Ministers. There are quasi-religious monarchs in the Far East, purely political ones in the Middle East, who actually run their nations, and symbolic kings and queens in Scandinavia.

Changes in society and public expectations mean the different faces of the monarch are set against each other. How can you be an enduring figure if you are appointing Prime Ministers? How do you act as a symbol for a multicultural nation as the head of one, narrow set of religious beliefs? The Prince of Wales is acutely aware of some of these tensions, talking of the monarch as 'defender of faith' rather than of 'the faith'. He is ready to slim down the monarchy, and is not hostile to a rethink of the monarch's constitutional role. He sees his contribution as being the 'conscience of the nation' - a job once filled by Diana.

A Mori poll released two days ago shows that Britons have lost a sense of distinctive national identity, with greater emphasis now placed on Welsh, English or Scottish nationhood. Senior royal advisers see this trend as both threat and opportunity. 'It is the task of the monarch to capture our sense of ourselves as a nation, what we stand for. We play a very long game.'

The Queen is the last monarch who will win widespread support simply by being who she is. The steady erosion of the notion that someone can be gifted power through their genes has begun, along with a new battle to win legitimacy. Charles knows that he lives or dies by our consent; and he is setting out to win it, even if that means short-term controversy.

At the very least, the royal circle knows that there is little or no appetite for the suggested alternatives. As one royalist said: 'The prospect of a President Branson or Thatcher is possibly the most powerful weapon in their armoury.' Being the least of evils may not match the glory days of the British monarchy, but it will do.

And given Charles's record thus far of igniting equal measures of outrage and admiration, it is clear that even if the monarchy does go the way of the Lords, it won't go quietly.